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Repsol Reports Significant Onshore Oil Field Discovery in US

Zacks Equity Research

Spanish oil giant Repsol S.A. REPYY recently discovered a giant oil field in Alaska, holding as much as 1.2 billion barrels of oil. The discovery marks the biggest onshore find in the U.S. in the last three decades.

Alaska’s oilfields in the North Slope were viewed as an aging basin owing to lowered production since the last three decades.  However, the current discovery by Repsol and ConocoPhillips promising oil discovery in Alaska  in January breathes new hope into Alaska’s North Slope.

Repsol partnered with Denver-based oil explorer, Armstrong Oil & Gas, Inc. in the project. Both the companies commenced exploration activities in the Nanushuk play in Alaska in 2008. Two wells, Horseshoe-1 and 1A wells, drilled during 2016-2017 winter campaign along with the earlier discovery in the adjacent Pikka field makes Nanushuk a significant emerging oil play.

Repsol owns 25% and 49% interests in the Horseshoe discovery and in the Pikka field, respectively. The remaining stake is held by Armstrong Oil & Gas which is also the current operator of the project. Production from Pikka is expected to begin in 2021, with a potential to extract up to 120,000 barrels of output per day.

Zacks Rank and Other Key Picks

Repsol explores, develops and produces crude oil products and natural gas. The company refines petroleum and transports liquefied petroleum gas and its associated products. In addition, the company produces a variety of petrochemicals and markets petroleum products, petroleum derivatives, LPG and natural gas. The company currently carries a Zacks Rank #2 (Buy).

The company has outperformed the Zacks categorized Oil-Gas Integrated International industry over the prior three months. During the aforesaid period, while Repsol’s shares rallied more than 9%, the broader industry declined around 5%.

Other favorably placed stocks in the broader industry include Pioneer Natural Resources Company PXD, Semgroup Corporation SEMG and Imperial Oil Limited IMO. All these companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Pioneer Natural is expected to report year-over-year growth of 28.9% and 161.4% in its revenues and earnings in 2018.

Semgroup posted positive average earnings surprise of 79.10% in the trailing four quarters.

Imperial Oil is expected to deliver year-over-year growth of 386.6% in its earnings in 2017.

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Imperial Oil Limited (IMO): Free Stock Analysis Report
 
Repsol SA (REPYY): Free Stock Analysis Report
 
Semgroup Corporation (SEMG): Free Stock Analysis Report
 
Pioneer Natural Resources Company (PXD): Free Stock Analysis Report
 
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